ASML Q1 Profit Drops As Revenue Declines - Update

4/18/2012 2:19 AM ET

Semiconductor equipment giant ASML Holding NV (ASML: Quote) on Wednesday said its first-quarter profit declined from last year, as it sold fewer units which led to a dip in revenue. The Dutch firm's revenue came in line with its guidance and advanced slightly from the prior quarter. The company expects second-quarter revenue to remain almost flat.

ASML has established clear dominance in the semiconductor lithography market, winning market share from Canon and Nikon. The company boasts of big chip-manufacturer customers such as Samsung, Texas Instruments, TSMC and Intel.

In the first quarter, net income declined to 282 million euros on a U.S. GAAP basis from 395 million euros last year. Earnings per share declined to 0.68 euros from 0.90 euros.

Adjusting for development expenditures and reversal of write-downs, net income based on International Financing Reporting Standards stood at 317.4 million euros compared to 405.1 million euros in the prior year.

Net sales dropped to 1.25 billion euros from 1.45 billion euros, as net system sales declined over 18 percent to 1.05 billion euros. In the previous quarter, the company generated 1.21 billion euros in net sales.

Units sold declined to 52 from 63. Gross margin declined to 41.8 percent from 44.7 percent last year.

ASML's forecast was for net sales of about 1.2 billion euros and gross margin of about 43 percent in the first quarter.

According to the firm, the sales trend is driven mainly by demand from Foundries and Integrated Device Manufacturers, or IDMs, which is expected to represent majority of sales in the next two quarters. The demand for 28-nanometer continued to be large and structural.

Eric Meurice, President and CEO of ASML, said, "Our financial results in the first quarter were in line with guidance, supporting our expectation for first half 2012 net sales of about EUR 2.4 billion. We see sales stability at current Q1 levels for the next two quarters with clear indications that the Logic segment will continue its strong demand trend for the remainder of the year."

The company announced a dividend of 0.46 euros per ordinary share.

Looking ahead, the company expects net sales of about 1.2 billion euros for the second quarter and gross margin of about 43 percent.

ASML said the quarterly results confirm that it is on track for 2.4 billion euros in net sales in the first half of 2012. Net sales are expected to be stable in the third quarter at first-half levels.

The stock rose 0.79 percent on Tuesday to settle at 37.92 euros on a volume of 1.76 million shares.